Motoring groups call for 3.4c fuel tax break

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VICTORIAN motorists could get an immediate 3.4 cents a litre
petrol tax cut, motoring groups say. But the RACV and NRMA said
federal and state governments did not care about the pain of high
petrol prices.

They said the Federal Government was double-taxing motorists
because the GST was applied on top of excise. Victorians pay 37.7
cents a litre excise. RACV government affairs manager David Cumming
said removing the GST would save 3.4 cents a litre.

"A tax on a tax is unfair. Excise is neither a good nor a
service, so why does it have GST on it?" he said.

NRMA president Alan Evans said: "Much as they protest they feel
for the motorist, I think it highlights the fact they don't care
that much."

Their comments came as the Federal Government accused business
of unjustified price rises in the wake of high fuel costs.

Transport Minister Warren Truss said business was "milking
consumers" and passing on price rises "way beyond" that justified
by petrol prices. He said higher petrol prices would cause only
"one or two cents" to be added to the price of a $2 carton of
milk.

He said plans by Dairy Farmers and National Foods to lift prices
by up to 16 cents should not be blamed on petrol. "They cannot
justify an increase of that magnitude on the basis of fuel price
increases," he said.

Although the Australian Competition and Consumer Commission had
special price monitoring powers when the GST was introduced in
2000, they have expired. It now relies on competition to regulate
prices and can act only in cases of collusion and price-fixing.

Opposition treasury spokesman Wayne Swan said the Government
should instruct the ACCC to formally monitor petrol pricing. He
said an ACCC study showed oil companies doubled their profits in
the period around hurricane Katrina in the US.

"I think families will be really disappointed to hear that when
they paid an extra 15 cents at the bowser, eight cents of that went
directly to oil company profits," Mr Swan said. "This is why Labor
says we must have a full ACCC investigation into profiteering and
price gouging."

Business groups said higher fuel costs were cutting into
profits.

The head of the Liquor Stores Association of Victoria, Phil
McGrath, said some bottle shops were now charging for delivery. He
also warned of a price hike for beer and wine when breweries
reviewed prices in February.

Foster's director of communications Geoff Donohue said most
transport costs were in fixed contracts so the impact of higher
prices would not be immediate. But increased fuel costs were likely
to force prices higher soon.

He said Foster's reviewed beer prices in February and they
usually rose in line with the consumer price index increase and
"whatever additional costs flow through".

The spokesman for the National Association of Retail Grocers of
Australia, Alan McKenzie, said he expected a range of basic
supermarket items to increase in price.

"Everyone has been on hold waiting to see what was going to
happen with fuel prices," he said. "Now it is clear that prices
will stay high. There is no choice, manufacturers are going to have
to start reflecting that in the price of goods."

He said price rises would start flowing through on "particularly
the basics, fruit and vegetables, bread and dairy products".

He said people were eating out less because of the petrol price
impact on their budgets and buying cheaper goods at the
supermarket.

"People will also trend down towards the bottom of the market,
buying cheaper brands as well as more of the generic brands, like
Black and Gold."